HILO — An elderly couple who lost their Leilani Estates home due to the ongoing Kilauea eruption is taking their insurer to court for allegedly acting in bad faith.
Philip and Lanell Haysmer, who were insured through Lloyd’s of London, filed their insurance claim May 24 after their house on Luana Street was destroyed, apparently from a fire caused by the eruption.
But, after two months, they aren’t any closer to getting their claim approved, said their lawyer, Jeffrey Foster. He said the Haysmers, who are in their 70s, are living in a friend’s garage and are in urgent need of assistance.
“They are delaying, delaying, delaying,” Foster told reporters. “They aren’t providing any type of guidance or decisions.”
The Haysmers are suing underwriters at Lloyd’s and other parties assigned to handle the claim in Hilo Circuit Court. Lloyd’s, headquartered in the United Kingdom, doesn’t have offices or employ claims adjusters in the state, according to the suit.
Foster, who said more lawsuits will be coming against Lloyd’s, said the couple has not been told if their claim will be approved or denied. He alleges the insurer and its representatives have been unresponsive, leaving the Haysmers living without the assistance, including aid for relocation expenses, that they paid for through the policy.
In contrast, the couple’s claim with their auto insurer, GEICO, was processed and paid promptly, Foster said.
“We want these lawsuits to change what is going on in Puna,” he said. “We want these lawsuits to be the impetus of change in Puna.”
Adding to their burden is that Lanell Haysmer, 70, suffered a stroke that resulted in a coma the day before the eruption started May 3. She was released from Hilo Medical Center on May 4.
“They paid their premium, and when it comes time to pay the claim, Lloyd’s has done nothing,” Foster said.
More than 700 homes have been destroyed by the eruption.
Like many residents of Lava Zone 1, the Haysmers had a choice between the Hawaii Property Insurance Association and surplus line carriers such as Lloyd’s.
Robert Joslin of Hawaii Public Adjusters assists homeowners with their claims. He said many of the problems he is seeing are with Lloyd’s of London policies.
Overall, Joslin said issues include people not getting paid or only receiving partial payments, and missed deadlines for responding to people’s claims.
“I am seeing a lot of bad faith activity on the part of carriers and some of the adjusters,” he said.
Joslin said he was contacted by two law firms that are seeking class-action lawsuits and would like to use him as an expert. He said that might be premature if the claims haven’t been formally denied.
During a lava insurance forum Saturday in Pahoa, Jeremiah Hutchins described having a similar problem as the Haysmers. He said he has coverage through Lloyd’s, but he keeps getting passed around to different people every couple of weeks, and he hasn’t seen any progress after two months.
Joslin said a lot of claims are handled by third or fourth parties and they change from policy to policy with Lloyd’s, so he’s not seeing much consistency.
“People tell me, ‘I got my Lloyd’s coverage.’ Which one?” he said. “We’re dealing with (people in) at least five different states.”
According to the lawsuit, the Haysmers filed their claim with Aloha Insurance, which sold them the Lloyd’s policy.
John Mullen &Co., a defendant in the case, was assigned to be the claim’s adjuster. A month later, they were informed the claim was being transferred to a second claims adjusting firm called Affirmative Risk Assessment, located in Arkansas.
A representative of John Mullen &Co. said they were unable to comment and had not seen the lawsuit.
Specialty Program Group LLC, which owns Monarch E &S Insurance Services, named in the lawsuit as Lloyd’s “correspondent,” also is listed as a defendant.
The Haysmers filed a complaint against Lloyd’s with the state Insurance Division on June 27.
An insurance division spokesperson said they had received 28 complaints related to the eruption. Three have been resolved, 22 are being investigated and three were withdrawn by the consumer.
The lawsuit claims breach of contract, breach of implied covenant of good faith and fair dealing, violation of state deceptive practices act, and civil conspiracy.
They are seeking payments under their insurance policy, attorney fees and punitive damages.
Contact information for a Lloyd’s representative wasn’t immediately available.
Email Tom Callis at tcallis@hawaiitribune-herald.com.
Tough one. From other reports, they were paying $2,700 in annual premiums (!)… however the contract fine print apparently also specifically excludes all “direct or indirect” damage from lava.
I know there are a lot of arguments on both sides of this whole issue… but bottom line is that I hate to see anyone face such hardship, even more so in their golden years. Hope they have a good outcome in their lawsuit… and wish them and all the other people who lost their homes the best going forward.
Funny, i don’t see any information about what the premium was for lava insurance? There must have been a premium for any type of lava insurance just as there is in my insurance for hurricane coverage. Living in North Kohala, where there has NEVER been a hurricane, yet we must pay a very high premium for hurricane insurance for our mortgage. I wonder what the premium was for lava insurance in an area that is the most active lava zone in the world. Why doesn’t the WHT disclose this…maybe the policy was a sham to begin with and the owners are just trying to gain the insurance that they supposedly bought to protect them from lava inundation? Why not tell the whole story and the truth…these people took a risk with their lives, fortunes, and property when they built and established lives in the most active lava zone in the world. It’s not like earthquake insurance where you never know when and where it will happen. Come on people…these idiots who built in lava zone one have no sympathy from me…they bought cheap and should expect NOTHING!
Sorry, Raoul, you do not have a clue what you’re talking about.
Lloyd’s lava protection policies are legitimate and common in LZ1 and LZ2. They are obviously practicing the delay payment route and need to be sued.
Additionally, USGS reports this eruption is unprecedented in over 200 years. So it sounds like you are quite misinformed about what homeowners should have expected from any eruption.
Please display some compassion or just say nothing at all. This is already an unprecedented tragedy for many people.
It is time for Lloyd’s to wake up (or be woken up). They have been receiving extra lava premiums for years from well paying homeowners. Time to step up.